Nestlé Greater China’s first-half revenue approached RMB 20 billion; Zhang Xiqiang said today that all operations are gradually gaining momentum, and particularly emphasized the need to focus on this one thing right now.

According to Nestlé’s semi-annual report reviewed by Xiaoshidai, if the aforementioned two businesses are included, Nestlé Greater China’s sales for the first half of the year totaled CHF 2.639 billion—approximately RMB 24.114 billion. In the same period last year, the figure stood at CHF 2.804 billion, equivalent to roughly RMB 21.3 billion at the exchange rate then. During this period, Nestlé continued its volume-driven growth trajectory in China. Organic growth for Greater China reached 1.6% in the first half, while real internal growth (RIG) stood at 2.9%; in Q2 alone, RIG accelerated to 3.8%, driven by sustained growth in out-of-home and e-commerce channels. Pricing contributed negatively 1.3%, primarily due to intense competition across the food and beverage industry. Breaking it down by category: Today, Nestlé noted that instant coffee, pet food, confectionery, and infant nutrition gained market share in Greater China, whereas condiments saw a decline in market share. In terms of growth rates by category: The coffee business achieved high-single-digit growth, supported by Nestlé Coffee ready-to-drink products and new functional launches. Nestlé Professional Foodservice also posted high-single-digit growth, fueled by continuous innovation and customer expansion. Confectionery grew at a high-single-digit pace, propelled by brands including Cui Cui Sha, Xu Fuxi, and KitKat. Purina PetCare delivered double-digit growth, driven by the launch of new Purina Pro Plan products and strong e-commerce performance. Condiments remained flat, with robust contributions from out-of-home and e-commerce channels. Infant nutrition recorded negative growth—but still outperformed the industry overall. Dairy declined, reflecting the broader slowdown in the dairy market. To drive growth, Greater China increased investment in advertising and marketing, resulting in an 80-basis-point decline in underlying trading operating profit margin. “Growth is the only truth.” “Amid dramatic market shifts and fierce competition, growth is the sole response.” Today, Xiaoshidai observed that Zhang Xiqiang, Executive Vice President of Nestlé Group and Chairman & CEO of Nestlé Greater China, wrote in an all-employee letter: “The progress and achievements made in the first half reflect the joint efforts of all business and functional teams across Greater China toward our growth goals—a true ‘one-team, all-in’ spirit. Cultural consensus around agility, innovation, collaboration, and accountability has taken root here.” He added that the past six months presented enormous market challenges, with profound changes in consumer demand and market structure—and intensifying competition across all business segments. Facing such conditions, every business team in Greater China proactively responded and continuously advanced, achieving both sales growth and improved profitability. He sincerely thanked everyone for their dedication and accomplishments. Zhang also reiterated in his letter: “Growth is the only truth.” He stated that over the past half-year, the Nestlé Greater China team steadfastly focused on “growth,” centering efforts on “sales growth,” “profit growth,” and “people productivity”—and delivered notable results. Specifically, under “sales growth,” the team intensified consumer-centric innovation: N3 Probiotic Milk was the sole project awarded Nestlé Group’s most prestigious biennial “CEO Award” at the Nestlé Innovation & Reinvention Awards; e-commerce capabilities were continuously strengthened, with many business units gaining online market share; and deep-distribution initiatives—including “one product, one QR code”—were rolled out across all business units.

Nestlé China’s first-half revenue was RMB 19.6 billion: The CEO said its China business is gradually stabilizing, urging the newly formed management team to closely monitor three key priorities; the original inventory reduction plan has been completed; and he candidly acknowledged that certain categories are still losing market share.

Xiaoshidai noted that, during the analyst Q&A session, Ferrero added that Nestlé currently does not operate in the U.S. infant formula market—and has no plans to enter it. “Today, the U.S. infant formula market offers little growth potential. Our current priority in infant formula lies in Asia and Europe—and all other markets—where we are fully committed to rebuilding consumer and healthcare professional trust in our brand. That is our strategic focus right now.” Danone previously expressed similar views. Additionally, Nestlé announced today that its transformation and cost-savings program is progressing smoothly. The “Fuel for Growth” initiative has cumulatively delivered CHF 1.7 billion in cost savings, putting it on track to meet its CHF 2 billion target by 2026. As Xiaoshidai previously reported, as part of the “Fuel for Growth” cost-savings program, Nestlé announced last year that it plans to eliminate approximately 16,000 positions globally over the next two years, implemented through appropriate consultation procedures. This restructuring will affect around 12,000 white-collar roles across all functions and regions. Looking ahead to full-year 2026, Nestlé expects organic growth to land between approximately 3% and 4%, with real internal growth accelerating versus 2025. Underlying operating profit margin is expected to improve year-on-year; second-half margin is projected to be broadly flat versus the first half. Free cash flow is forecast to exceed CHF 9 billion. External commentary Nestlé’s latest financial report has drawn significant attention from external observers. Following the afternoon earnings release, Nestlé’s share price briefly plunged over 7%, before partially recovering. Today, Barclays analysts stated in a report: “We believe real internal growth (RIG) remains insufficient, and anticipate some profit-taking.” SWI—the Swiss media outlet based in Nestlé’s home country—noted today that sales volume performance is viewed as a critical indicator of Nestlé Group’s operational recovery. After years of stagnant growth—where growth relied heavily on price increases—Ferrero, who assumed leadership in September 2025, has set “sustainable volume growth” as his top strategic priority. However, SWI further pointed out that, judging from the interim report, Nestlé’s profitability remains under pressure. Specifically, persistently high prices for coffee and cocoa have significantly weighed on margins. Moreover, U.S. tariffs—as well as increased spending on advertising, innovation, and strengthening core brands—have also dampened performance. In response, Xiaoshidai observed that Ferrero remarked during today’s conference: “Overall, we will concentrate on doing what’s within our control—and executing exceptionally well. As for external challenges thrown our way—such as rising costs—we’ll respond through adjustments to promotions, pricing, and pack sizes, thereby driving growth. We aim to strike a balance between real internal growth (RIG) and pricing.” Interestingly, just before today’s earnings release, Jefferies analysts upgraded Nestlé’s rating from “Hold” to “Buy”—propelling the company’s share price yesterday to a 14-month high. They believe Nestlé, under Ferrero’s leadership, is showing signs of recovery—particularly in coffee and pet food, and also exhibiting early signs of revival in China and India.

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